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Vietnam war veterans filed a federal suit seeking judgement that the US military had failed post-traumatic stress disorder (PTSD) victims.
They charged that the forces had failed to upgrade the discharges of war veterans who developed post-traumatic stress disorder, resulting in stigma and loss of benefits.
Five Vietnam veterans and three veterans organisations are suing the army, the navy and the air force.
They say they suffered PTSD before it was recognised and were discharged under less-than-honourable conditions that made them ineligible for veteran benefits.
The lawsuit seeks class-action status to represent tens of thousands of veterans.
It says the military has systematically denied applications for upgrades involving evidence of PTSD.
"Unfortunately, the Pentagon has refused to correct decades of injustice experienced by tens of thousands of veterans who suffer from PTSD but were discharged before it was a diagnosable condition," said a spokesman for the Veterans Legal Services Clinic at Yale Law School, which represents the victims.
"This action seeks to finally secure justice for these veterans."
Vietnam veteran Conley Monk developed PTSD after suffering traumatic events including a barrage of enemy mortar rounds and the gassing of his unit, according to the lawsuit.
"My discharge status has been a lifetime scar," Monk said.
"If I were discharged today, my PTSD would be recognised and treated and I wouldn't be punished for having a service-connected medical condition."
Since 1993, only 4.5 per cent of applications for discharge upgrades involving PTSD have been granted.
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